Dear Lifehacker,
I just heard about Google Wallet (and a little about the "NFC" technology that makes it work). What exactly does Google Wallet do, and how, when, and where can I actually use it?

Sincerely,
Wondering About Wallets

Dear Wondering,

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Good question! Google Wallet can seem pretty radical and a little confusing at first, but we're actually pretty excited about. Here's the lowdown on what it is, how it works, and what it means for your practical, day-to-day life.

What's Google Wallet?

Google Wallet is a new service that allows you to pay for things with your smartphone like you currently do with credit cards. When you're at a store, you'll just be able to tap your phone to a receiver and "scan" a digital version of your credit card to pay for things. The idea is that once the service becomes more popular, you won't have to carry a wallet full of cards wherever you go. Sure you may still need to carry one as a backup, but you'll be able to make many of your purchases just by pulling out your phone.

Can I Actually Use It?

Google Wallet hasn't officially launched yet, but at launch time, it will work at a number of different merchants, like CVS, Subway, RadioShack, and more—many of them even offering loyalty coupons when you use Google Wallet. To see all the places you can use it, check out Google's interactive map. Obviously, as time goes by more merchants will hop on board, but it already has a few places you probably shop at regularly, which is pretty cool.

Likewise, when it launches, Google Wallet will only be available on the Sprint Nexus S 4G. It will likely be rolling out to more phones, though, so more people will be able to use it in the future—just not quite yet.

How Does It Work?

The technology that makes Google Wallet tick—called Near Field Communications, or NFC—has been around for long enough that there are other MasterCard devices called PayPass you can carry around to get the same functionality. Google Wallet is just the first service bringing the functionality to smartphones.

At launch time, it will also work out-of-the-box with the Citi MasterCard, letting you charge items directly to your credit card by scanning your phone. However, you don't have to be with Citi to use Google Wallet—they've also set up a system where you can transfer money directly from your bank account to your Google Wallet account, which will then go toward your purchases. Citi is just the first bank to eliminate that middleman, and more banks will hopefully follow.

Google's also putting a stress on security for this release, since many people may be uncomfortable putting financial information on their phone. Google Wallet will only be accessible with your Google Wallet PIN, though, and the NFC chip in your phone is completely separate from your phone's memory, only allowing the official receivers to access your information. Obviously, if your phone is stolen, you'll still want to cancel your credit cards, but it's not really any different than if your wallet were stolen.

So, I Probably Won't Be Able to Use It for a While?

As of right now, only a few people will be able to use Google Wallet when it launches, and only at a limited number of stores around the country. However, the service definitely has a lot of potential, and we expect to see it (and possibly others like it) grow quite a bit in the coming months. Hopefully Google Wallet and NFC make a little more sense to you—it's something we think is pretty cool, and we're excited to see where it goes.